Collapsed contractor owed former owner £1.4m

A former owner of Greswolde Construction has likely lost £1.4m as a result of the company’s collapse, its administrators have revealed.

The Solihull-based contractor, which went down in August, owed a total of £7.6m, according to a report by Quantuma Advisory published on Companies House.

Among those owed money was ex-owner Malcolm Priest, who was due £1.4m. He bought the business in 1995 and sold it on retirement in August 2021, a year before administrators were called in.

The report revealed that there is unlikely to be enough money raised during the administration to clear the debt with Priest.

“It is currently anticipated that there will be insufficient funds available to allow for a distribution to be made to the secured creditor [Priest],” the administrators said.

The company, which turned over £19.4m in its last accounts for the year ending in December 2021, employed 24 staff, who were made redundant. Its financial trouble was a “direct result” of the pandemic, the administrators said, shortly after they were appointed in August.

Former staff are expected to receive a total of £17,796 between them in relation to unpaid holiday claims and wages, and a further unspecified amount for pension contributions.

A list of 281 firms to which Greswolde Construction owed money included suppliers and specialists, such as fire-protection companies, carpentry firms and scaffolders, which were owed a total of £4.7m.

The administrators did not highly rate the prospect of getting unsecured creditors the money they were owed.

They said: “It is unlikely that there will be sufficient realisations to discharge the […] claims in full and therefore the joint administrators envisage that there will be no resulting net property from which to deduct [money].”

A further £1.5m was owed to HMRC for VAT payments, PAYE income tax and employees’ national insurance contributions. The administrators anticipated that this debt would be cleared, if funds remained after other preferential creditors had been paid.

Quantuma’s report on the situation regarding the company’s finances was this week deemed to be approved by creditors, according to a notice posted on Companies House.

A total of 20 construction-related firms collapsed in August, according to data provided to CN by Creditsafe. This number increased to 21 in September and included the collapse of what was considered to be the UK’s largest roofing contractor.

Malcolm Priest was approached for comment.

Leave a comment